Home Warranties

Warranties can be provided and/or purchased for new and existing homes. They fall into several categories and offer different levels of protection for a buyer. As with warranties on other products, there are exclusions to coverage.

Builder warranties are provided almost without exception on new homes. The builder agrees to come back within the first year to correct problems related to all systems, and sometimes extending to cosmetic items discovered after closing. Typical exclusions may include caulking, minor concrete cracks, natural and installed landscaping, and anything resulting from changes that the homeowner makes to the property.

Manufacturer warranties can extend beyond a builders’ one year warranty to cover some appliances for up to two years and A/C compressors for up to five years. Certain brands of windows may carry extended warranties of up to ten years. If an existing home has new systems, there may be warranties that can be transferred to the new owner.

Extended warranties can be provided by a builder to cover major systems for two years, and offer a structural warranty for 10 years. A builder must pay a fee to join an extended warranty program and pay a premium for each house sold. These costs are built into the price of the home. Because of the cost many small volume builders do not offer these warranties, but may still build just as good a home.

Home Warranty Programs are sold by a number of companies to cover a home for one year after purchase. They can be purchased by the buyer or seller and paid for at closing. The warranty will typically cover heating, air, plumbing, electrical, built-in appliances, and swimming pools. Most programs require a deductible to be paid for each service call and therefore may seem more like insurance than a warranty. Because of this, these programs are not a substitute for a home inspection prior to closing. They can be, however, of significant value if used for a large item like a furnace or air conditioning compressor. Most programs exclude repairs related to any condition that may have existed prior to closing and consequential damage to the property even if the result of a covered item. (Example: sheet rock or carpeting damaged by a plumbing leak will most likely not be covered.)

You should confirm whatever warranties apply and consider available programs prior to completing a contract to purchase. In the absence of a specific warranty the seller of the property has no obligation for repairs after closing.